Press briefing of Cabinet Decision taken on 2016-03-16

Restructuring of Lanka Sathosa

- In August 2014, Lanka Sathosa imported 257,853 metric tons of rice, on a bank loan of Rs.14,078 million and due to the failure in selling the stock of rice as expected, it has become impossible to settle the loan obtained. By now a sum of Rs.5,742 million has been settled and further Rs.8,754 million together with the outstanding interest is to be settled. A sum of Rs.17,000 million has been spent for the importation of this stock of rice including port charges, demurrages, transportation and warehouse costs. It has been identified that 3,048 Metric tons of rice from the presently remaining stock is unfit for human consumption. It seems that the anticipated income from selling the remaining stock of rice, will not be sufficient to settle the outstanding loan amount and to have the working capital required to continue the daily operational activities of Lanka Sathosa. Accordingly, in order to avoid this situation, the joint proposal made by Hon. Ravi Karunanayake, the Minister of Finance, Hon. Rishad Bathiudeen, the Minister of Industry and Commerce, Hon. P. Harison, the Minister of Rural Economy, Hon. Malik Samarawickrama, the Minister of Development Strategies and International Trade, to provide the funds required to meet the urgent working Capital requirement and to pay the outstanding loan due to the state banks by Lanka Sathosa, from the General Treasury, was approved by the Cabinet.